Social Sciences and History / Unit 13 SSH 1237 short lesson, about 20 seconds
Why a Monopolist's MR Falls Below Price
Captions available
The idea
A monopolist is a price maker: choosing quantity sets the market price. Its total revenue starts low at small output, rises, then falls, since large quantities sell only cheaply. Marginal revenue declines with each unit, since the lower price applies to every unit.
In practice
The tenth unit's price, minus the discount on nine.
Where people slip
Marginal profit: MR minus MC.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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